21:14 23-08-2014
MAIN Russian
About us On-line subscription
KazakhstanTajikistanUzbekistanKyrgyzstanTurkmenistanWorld
POLITICSBUSINESSINCIDENTSSOCIETYCULTURESPORTANALYSISSCIENCE
India's new government unveils reform budget

Bishkek (AKIpress) - India's Narendra Modi-led government has unveiled incremental measures to boost capital spending in Asia's third-largest economy in its maiden budget, and reassured foreign investors that they will be treated fairly, the IBT reports.

The neutral budget, tabled in the lower house of Parliament on 10 July by Finance Minister Arun Jaitley, has raised the limits on foreign investment in defence and insurance sectors from 26% to 49% through the Foreign Investment Promotion Board (FIPB) route which makes sure investments undergo strong scrutiny.

However, the budget continued to prevent non-residents from assuming majority control in projects that can supply weapons to India, the world's leading arms buyer.

Retrospective Taxation

The budget said the government will constitute a high-level committee to review retrospective tax claims blamed for obstructing foreign investments into India, particularly after firms such as Britain's Vodafone were served with massive tax demands.

Jaitley sought to reassure investors by promising a stable tax regime and said the government will not "ordinarily" create new liabilities retrospectively.

He, however, stopped short of ditching the 2012 legislation on retrospective taxation.

Vodafone and India have been embroiled in a multi-billion dollar tax row for over six years, ever since the British firm acquired Hong Kong-based Hutchison Whampoa's Indian mobile assets in 2007.

Jaitley said that ongoing disputes over retrospective tax claims at various courts and "legal fora" will "naturally reach their logical conclusion."

The 2012 legislation overturned a Supreme Court judgment which dismissed Vodafone's tax demand earlier that year.

Deficit Target

Jaitley, in his budget speech, said he had "accepted" the "daunting" budget deficit target of 4.1% of gross domestic product (GDP) for the financial year ending March 2015. The 45-day-old Modi regime inherited the target from the previous Congress-led coalition government.

Dinesh Kanabar, Deputy CEO, KPMG India, said the finance minister's pledge to stick to a fiscal deficit target of 4.1%, against a backdrop of an oil crisis and poor monsoon rains, while 'commendable', appeared 'a bit ambitious'.

GST

Jaitley also said the government hopes to roll out a landmark tax reform to merge India's 29 states into a common market, by December 2014.

Jaitley added that New Delhi will be "more than fair" in its dealings with India's states about how revenue will be allocated under a new GST regime.

Economists have said that the proposed nationwide goods and services tax (GST) will boost revenue, while making it easier to do business in the sub-continent.

Shubhada Rao, chief economist, Yes Bank, said in a note: "Fiscal consolidation is a strong takeaway. The FDI in insurance and defence and the plethora of schemes for improving the rural economy with all round focus on development programmes, are a key thrust. It's a good beginning.

"For the 4.1% target of the fiscal deficit, the heavy lifting may be done by PSU disinvestment and non-tax revenue streams."

Dinesh Thakkar, chairman and managing director, Angel Broking, said: "...Infrastructure, real estate [and the] finance sectors were amongst the biggest winners, with measures to improve funding availability to infrastructure and low-cost housing and providing a boost to REITs and bank infra lending...."


Twitterfacebookprint
17:15 10.07.2014
LATEST NEWS
17:12 UN Rights: Syria war toll reaches 191,000 in 3.5 years16:50 Ukraine says 90 Russian aid trucks enter Ukraine16:39 Egypt tour bus collision kills 33 near Sharm El-Sheikh16:34 State Registration Service brings 342.8 million soms to state budget in H1 201416:24 Tashkent to host Global Bridge Festival16:15 4-earthquake jolts southern Kyrgyzstan16:07 President and Education Minister discuss higher education reforms and preparation for 2014-2015 academic year16:04 Tajikistan attaches great importance to cooperation with China – Ambassador15:53 Kazakhstani children to be fully covered with preschool education by 202015:51 Over 2k workers needed for collection of biometric data of Kyrgyzstanis - GDS15:48 Kyrgyzstan registers 25k marriages and 18k divorces in H1 201415:48 Lack of common mechanism for use of Batken pastures by citizens of Uzbekistan, Tajikistan causes border problems15:37 Employees of Registration Service have no idea of how to implement biometric project – Chairman15:17 229k people issued micro-loans worth 14.2b soms in H1 201415:09 Vice PM Dil denies words of Osh mayor over Uzbekistan's demands to cede several territories in return for resumption of gas supply14:58 28 facilities privatized during second wave of privatization in Kazakhstan14:45 Osh and Jalal-Abad regions reveal 2.5k stateless persons – State Registration Service14:32 Uzbekistani becomes champion in air pistol shooting at Summer Youth Olympic Games14:05 15yo Afghanistan citizen detained in airport in Astana with fake passport13:55 London's horse head statue replica in At-Bashy starts breaking after a year of its installation
Astana
+35° C
Ashgabat
+38° C
Bishkek
+35° C
Dushanbe
+30° C
Tashkent
+39° C
exchange rates
 
69.61
52.41
8.52
1.46
241.71
182.00
29.59
5.03
6.57
4.98
0.81
0.14
3168.15
2344.38
381.47
65.12
3.78
2.85
0.46
0.08

© AKIpress News Agency - 2001-2014
Use of the AKIpress.com materials must be accompanied by a hyperlink to www.akipress.com
Our address:
Moskovskaya str. 189, Bishkek, the Kyrgyz Republic
e-mail: english@akipress.org, akipressenglish@gmail.com;
Tel/Fax: +996(312)90-07-75